Jackpotjoy reduces interest payments through new loan facilities

Jackpotjoy reduces interest payments through new loan facilities

Wednesday, November 29, 2017 Posted by Luke Massey
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The operator has secured a £388.5 million Senior Secured Term

Bingo-led Jackpotjoy has secured a £388.5 million senior secured term to reduce its annual cash interest payments by approximately a third.

The operator has confirmed opening of the secured loan, made up by a £375 million equivalent term loan (term facility) and a £13.5 million revolving credit facility.

The term facility comprises two committed tranches of £250 and €140 million. It has a maturity of seven years and a weighted average interest rate of 4.91% above the London Interbank Offered Rate (Libor), with step downs of 0.75% based on future leverage ratios and credit ratings.

The London-listed online gambling group has confirmed that proceeds from this term facility will be used to repay the existing first and second lien term loans.

Meanwhile, the revolving credit facility has just one tranche of £13.5 million, a maturity of six years and a weighted average interest rate of 4.25% above Libor.

Completion of the two facilities is expected to reduce Jackpotjoy’s annual cash payments by over £9 million in the first year. Pro forma total net leverage (including earn-out obligations) is 3.40x, in line with the 3.35x adjusted net leverage reported at 30 September 2017.

Keith Laslop, Jackpotjoy Plc Chief Financial Officer, said: “We are thrilled to have secured the new Facilities which clearly demonstrates the growth as well as the stability of our underlying businesses.

“The significant reduction in interest costs, alongside further future rate reductions, allows us to further drive shareholder value through accelerated deleveraging and investment in the long-term growth of the business.”

Jackpotjoy, which offers bingo and casino games through subsidiaries such as www.jackpotjoy.com and www.verajohn.com, made the move to the London Stock Exchange in January, citing 'a lack of investor appetite' in Canada and the fact that two thirds of its revenues are generated in the UK.

Totally Gaming says: It’s been a year of upheaval for Jackpotjoy after making the logical move to London. The Group announced last month that Andy McIver is to step down as chief executive, while Q3 results were mixed; gaming revenue saw a 14% increase to £75.4 million and operating cash flows climbed by 78%, but adjusted net income dropped 14% from £21.2m to £18.3m.

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